The Chair Company Produces Two Modular Types of Chairs: One

question 236

Essay

The Chair Company produces two modular types of chairs: one for the residential market,and the other for the office market.Budgeted and actual operating data for the year 2018 are:
$$\begin{array} { l r r r } \text { Static Budget } & \text { Residential } & \text { Office } & \text { Total } \\\text { Number of chairs sold } & 260000 & 140000 & 400000 \\\text { Contribution margin } & \$ 26000000 & \$ 11200000 & \$ 37200000 \\& & & \\\text { Actual Results } & \text { Residential } & \text { Office } & \text { Total } \\\hline \text { Number of chairs sold } & 248400 & 165600 & 414000 \\\text { Contribution margin } & \$ 22356000 & \$ 13248000 & \$ 35604000\end{array}$$
During 2017,an office products research firm estimated the industry volume for residential and office chairs of the type sold by the Chair Company to be 2 400 000.Actual industry volume for the year 2018 was only 2 200 000 chairs.
Required:
Calculate the following variances in terms of contribution margin:
a.Calculate the total static-budget variance,the total flexible-budget variance,and the total sales-volume variance.
b.Calculate the sale-mix variance and the sales-quantity variance by type of chair,and in total.
c.Calculate the market-share variance and market-size variance.
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Definitions:

Social Stratification

The hierarchical arrangement and classification of individuals and groups in any given society based on wealth, power, prestige, or other criteria.

Working-Class

Describes individuals or groups who are employed in low-paying wage jobs, often involving manual or industrial labor, and typically associated with lower socioeconomic status.

Social Stratification

The arrangement or classification of society into levels or layers based on factors such as wealth, occupation, and social status.

Feudalism

A social and economic system in medieval Europe where land was held by nobles in exchange for military service, and labor was provided by peasants who lived on their land.